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TMI Blog2018 (7) TMI 1317X X X X Extracts X X X X X X X X Extracts X X X X ..... ption under section 54 of the Income Tax. 3. Brief facts of the case are that a search and seizure operation was carried out in the case of JCM group on 17.11.2011. The assessee was also covered under the search. A notice under section 153A of the Income Tax Act was issued and served upon the assessee. Originally the assessee has filed return under section 139 of the Act on 30.7.2009 declaring total income at Rs. 78,73,470/-. On scrutiny of the accounts it revealed to the AO that the assessee had acquired a residential flat situated at C/2/33, 3rd Floor, Goyal Intercity, Thaltej, Ahmedabad in financial year 1995-96 for a consideration of Rs. 4,01,000/-. He has sold this property during this accounting year for a consideration of Rs. 13,50, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and would entitle deduction under section 54/54F of the Act. The ld.counsel for the assessee emphased that subsequent development at the end of the builder may disentitle him for claiming exemption under section 54, but in that case, long term capital gain will be taxable in the hands of the assessee in the year in which the builder has returned the money. On the other hand, the ld.CIT-DR contended that the assessee failed to fulfill conditions of section 54 in the present assessment year. Therefore, he has not entitled for any exemption. The ld.CIT(A) has rightly disallowed the claim of the assessee. 5. We have duly considered rival submissions and gone through the record. As far as the taxability of capital gain amounting to Rs. 5,19,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (SI. No. 428), such cases may also be treated as cases of construction for the purposes of sections 54 and 54F of the Income-tax Act. 3. The content of the circular may be brought to the notice of all officers working under you. Sd/~ Ajay Kumar . Undersecretary (ITA-II) Central Board Of Direct Taxes Enclosed : Circular no. 471 [F.No.225/174/93-ITA-II dated 16-12-1993 from Central Board of Direct Taxes, New Delhi.] [Enclosure Circular No. 471] Subject: Capital gains tax-Whether investment in a flat under the Selffinancing Scheme of the Delhi Development Authority would be construction for purpose of sections 54 and 54F of the Income-tax Act, 1961. Sections 54 and 54F of the Income-tax Act, 1961, provide that cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case also the assessee has booked a flat in a scheme launched by "PIPL". He has made payment through account payee cheque and that concern has issued receipt to him. Thus, in the assessment year 2009-10 case of the assessee falls within the ambit of section 54, because the assessee has purchased a house under a selffinance scheme in the same assessment year. However, during the course of assessment proceedings, it emerged out that there was change in the circumstances. Certain development taken place whereby the flat could not be constructed and builder returned the money. This change in the circumstances would disentitle the assessee from claiming exemption under section 54. This change in the circumstance taken place in accounting year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 64 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act, on or before the expiry of twelve months from the end of the month in which such order is received or passed by the Principal Commissioner or Commissioner, as the case may be; or (ii) where, in the case of a firm, an assessment is made on a partner of the firm in consequence of an assessment made on the firm under section 147, on or before the expiry of twelve months from the end of the month in which the assessment order in the case of the firm is passed. Explanation 2.-For the purposes of this section, where, by an order referred to in clause (i) of sub-section (6),- (a) any income is excluded from the total income of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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